Finance Minister Enoch Godongwana has called for ethical financial management, strict consequence management, and prudent procurement practices within government departments in a bid to restore deteriorating public finances, which would allow the state to deliver the required services.
Godongwana openly admitted yesterday that South Africa’s fiscal metrics have deteriorated on the back of projected R22 billion revenue shortfall, rising borrowing costs and weak economic growth.
The finance minister said that public finances were currently in a difficult position, one that was increasing in complexity and uncertainty.
He said a number of factors had put tremendous strain on the financial resources the government had available to address its most urgent service delivery priorities.
“The short-term risks to the local and global economy that we predicted in the February Budget have now materialised. Government has collected much lower-than-expected tax revenue,” Godongwana said.
“At the same time, tighter financial conditions have made it difficult to borrow more and at affordable rates.
“Continued load shedding, the poor performance of our logistics sectors, and the lasting damage done by state capture to our institutions have made the difficult fiscal situation even more challenging.”
Godongwana was speaking at the 2023 Public Finance Management Conference to build knowledge and promote good public financial management practices.
He said accountability, transparency, and ethical financial stewardship were the pillars upon which the government must build and nurture trust with South Africans.
Godongwana said a crucial element for responsible fiscal governance was consequence management, and it was imperative that the government hold individuals and entities accountable for financial misconduct.
“Without swift and fitting consequences, we risk eroding public trust in our capacity to manage public funds effectively, with less and less funding available to deliver much-needed services to our people,” he said.
“Furthermore, ethical sourcing of goods and services through public procurement stands as an unassailable priority. Non-compliance with ethical standards in procurement can have far-reaching consequences, compromising the integrity of our financial processes.”
This comes as the National Treasury has issued a circular to all government departments to drastically reduce their expenditure by 15% in the lead-up to the Medium-Term Budget Policy Statement.
On Tuesday, the Treasury published cost-containment guidelines which will freeze hiring new employees, cut travel, conferences and capital spending by government departments in a bid to achieve much-needed savings and prevent the materialisation of potentially crippling resource constraints in the latter part of the 2023/24 financial year.
The proposed budget cuts have been labelled by a number of organisations as drastic austerity measures.
Solidarity’s Social Workers’ Network said yesterday that even though misappropriation of funds in government departments was a reality and savings were needed, further irresponsible measures could result in a social crisis.
Solidarity’s Bianca Smit said steps to freeze all jobs within the Department of Social Development would have dire consequences.
“The ratio between a social worker and the recommended number of cases each worker must handle is 1 to 60. Yet, most social workers currently deal with two or three times as much on a scale of about 1 to 180,” Smit said.
“Should job appointments be frozen now, the availability of social services decline, which leads to longer waiting periods for help as well as limited access to social support for vulnerable communities.”
Solidarity has, therefore, appealed to the government to take the consequences of limitations on social workers’ jobs into account when making decisions about austerity measures.
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